Lawyer
An expert in corporate and international corporate law. He has many years of experience in establishing and reorganizing companies, supporting M&A transactions, as well as providing legal support for opening and running a business in the EU, Asia, and North America.
ACCOUNTING SUPPORT FOR BUSINESS (FIRM) IN ITALY
Doing business in Italy requires a detailed understanding of national accounting requirements, tax obligations, labor regulations, and corporate law.
So, let’s uncover the key aspects of accounting support for companies in Italy, with an emphasis on the legislative framework, practical nuances, and business responsibilities.
The first step to setting up a company in Italy is choosing a legal form.
The main options are:
Società a responsabilità limitata (SRL) – Limited Liability Company (LLC).
Features:
- Possibility of creation by a single founder (SRL Unipersonale).
- Authorized capital – from 1 euro (since 2016).
- Limited liability of participants.
- The need to register with the Registro delle Imprese (Companies Register).
Società per azioni (SPA) – joint-stock company (AT).
Features:
- Authorized capital – from 50,000 euros (25% of the contribution upon creation).
- Shares may be publicly traded.
- Requires a supervisory board (Consiglio di Amministrazione).
Other forms:
- Società in nome collettivo (SNC): Full liability of the partners.
- Società in accomandita semplice (SAS): Mixed liability (active and passive partners).
- Libera professione: For licensed professions (e.g. architects, doctors).
Please note that the choice of form affects the scope of accounting reporting, tax obligations, and corporate structure.
All companies in Italy are required to keep accounting records in accordance with:
- Codice Civile (Civil Code), in particular Book V (on commercial companies).
- Decreto Legislativo 38/2005 (national accounting standards).
General requirements for accounting in Italy:
Accounting books:
- Libro giornale (Diary): Recording of all transactions.
- Libro inventario (Inventory book): Display of assets/liabilities.
- Libro dei soci (Book of Members): For SRL and SPA.
- Storage location: 10 years at the company headquarters.
- Language: Italian required.
Features for SRL and SPA:
- Mandatory audit: If criteria are met (e.g. assets > 4.4 million euros, revenue > 8.8 million euros).
- Publication of the report: Once approved, the report is submitted to the Registro delle Imprese and published on the Infocamere portal.
Tax system
Italy has a complex tax system that includes:
Corporate tax (IRES)
- Rate: 24% (since 2017).
- Tax base: Profit declared in financial statements.
- Tax return: Submitted within 11 months after the close of the financial year (usually by November 30).
- Regional tax (IRAP)
- Rate: ~3.9% (depends on the region, e.g. 4.82% in Lazio).
- Base: Gross profit + salary costs.
VAT (IVA)
- Rates: 22% (standard), 10% (e.g. on food), 5% (on social services), 4% (books, pharmaceuticals).
- Tax Declaration (Dichiarazione IVA): Monthly or quarterly.
- Deadline: April 30 (for the previous year).
- Tax on dividends and royalties
- Dividends: 26% (tax withheld upon payment).
- Royalty: 30% (can be reduced under a double taxation convention).
At the same time, companies must obtain a Codice Fiscale (tax number) and register with the Agenzia delle Entrate (Tax Office).
As for labor law in Italy, it is regulated by the Labor Code (Codice del Lavoro).
Employment contract
Types:
- Contratto a tempo indeterminato (indefinite).
- Fixed-term contract (up to 12 months).
Employer’s responsibilities:
- Employee registration with INPS (social security).
- Payment of contributions (~30% of salary).
- Salary (Busta Paga)
Ingredients:
- Lordo Scholarship (gross).
- Contributi providenziali (contributions to INPS).
- IRPEF (personal income tax).
- Compilation: Each employee receives a busta paga (pay slip) every month.
- Vacation and sick leave
- Vacation: 4 weeks per year (TFR – Trattamento di Fine Rapporto, paid upon dismissal).
- Hospital: 100% payment through INPS.
Financial reporting
Companies are required to prepare a balance sheet (balance sheet) in the following format:
- Balance sheet structure
- Stato Patrimoniale (Balance Sheet): Assets/liabilities as of the end of the year.
- Conto Economico (Income Statement): Income/expenses.
- Nota Integrativa (Explanation): Detailing of articles.
- For SPA: Management Report (Management Analysis).
- Submission deadlines
- After approval by the shareholders’ meeting (usually by April 30).
- Publication in the Registro delle Imprese through the Modello Unico.
Audit
When is it mandatory?
For SRL and SPA, if:
- Assets > 4.4 million euros.
- Revenue > 8.8 million euros.
- Number of employees > 50.
Auditore Legale (licensed auditor) or Società di Revisione (auditing firm).
Procedure
- Financial statement review.
- Signing the Relazione del Revisore (auditor’s report).
Penalties for non-compliance
- Late filing of reports: Fines up to 1,000 euros + 0.1% of turnover.
- Unverified data: Fines up to 50,000 euros.
- Tax evasion: Fines up to 300% of unpaid tax + criminal liability.
To successfully do business in Italy, it is important to work with a qualified tax consultant (commercialista), who will ensure proper company registration, correct reporting and optimization of tax obligations.
It is recommended to implement modern accounting software – systems such as SAP, Oracle NetSuite or Italian solutions such as Mago4 significantly simplify financial management.
It is also mandatory to comply with electronic reporting requirements: the use of Fattura elettronica has become the standard for B2B operations.
It is equally important to constantly monitor changes in legislation, in particular the update of IVA or IRES rates, to avoid penalties and unexpected tax risks.
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